RBI chief hits out at farm loan waiver |
Reserve Bank of India Governor Urjit Patel has stressed the need for building a national consensus on loan waiver schemes. He said this was needed so that promises such as loan waivers are not made during elections. There is need to create consensus so that such loan waiver promises are eschewed. Otherwise, sub-sovereign fiscal challenges in this context could eventually affect the national balance sheet, he said. The RBI Governor`s observations assume considerable significance coming as they did in the wake of the newly-formed BJP government in Uttar Pradesh announcing farm loan waivers in tune with its poll promise. The maiden meeting of the Uttar Pradesh Cabinet headed by Yogi Adityanath took a decision early this week to waive agricultural loans worth ₹36,359 crore.Uttar Pradesh ranks third in terms of agricultural credit exposure. The State has a 9.3% market share in agricultural credit. About 45% of its total exposure is in the rural areas. Bankers, too, have opposed the move as they felt that such schemes distort the credit culture.
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